3 Executive Summary For the purpose of this project, Performance Management isdefined as a shared process that includes assessing, managing, planning, and improving an employee s performance to promote development that serves both the individual and the organization. As the University endeavors to transforms into one of the world s top three public research institutions, it is important that a comprehensive performance management system be adopted to support this mission. There also needs to be an expectation that all University leaders and supervisors will apply performance management consistently in support of the University s mission. Colleges, departments and units will need to align their missions and value statements accordingly, and also assist employees in connecting their objectives to the University s overall mission. One benefit of this linkage is that people will have a stronger and clearer view of their roles as employees of the University, and they will better understand how they can contribute and develop through their work. They would become more engaged by understanding the University s mission, the expectations for their work, and what they can expect from the University s performance management and career mobility system. This improved engagement would in turn benefit the University s recruitment, hiring, and retention processes and assist the University in achieving its mission to become a top three public research institution. It must be emphasized that organizational leaders must regard performance management as being core to the operations of the organization. It will be important for the University s president to support performance management, but it may be even more crucial for top-tier (and more permanent ) leaders such as deans and vice presidents to be on board in order for performance management to succeed, since it has been shown that the amount of buy-in for a performance management system has a direct effect on its success or failure. Failure is guaranteed if leaders and managers do not support the system and/or do not model behaviors and values that are consistent with their words in support of the system. In an organization as big and complex as the University, support must come from the top down to be propagated throughout all levels. It is also important for an organization to invest the necessary time and resources needed to establish and manage a successful performance management system. University Libraries is an example of an University unit who has been able to develop an effective performance management system since its dean has committed resources to this effort and has successfully motivated supervisors and employees to support and utilize the system. There is no one ideal performance management system, but University Libraries has shown that a system needs to be flexible enough to accommodate changes over time, such as changes in jobs and unit goals, and also enable continuous development by allowing supervisors and employees to build the necessary skills through appropriate training and coaching efforts. University Libraries has also shown that building an effective sense of team will occur if everyone is evaluated fairly and consistently, and if reviews and feedback are a regular part of the dialogue between supervisors and direct reports. An organization should not only invest in performance management, but also in career mobility as a part of the process of supporting and developing its employees. Career mobility can include recruitment, retention, and succession issues. There are people at the University who will be retiring, and others who will be seeking new opportunities and challenges while desiring to remain at the University. Career mobility is currently not uniformly applied within the University, as many supervisors do not actively engage their employees in growth efforts or are unable to do so due to issues such as lack of funding within their units. The University s Office of Human Resources should become a one-stop place for people to get information and assistance regarding career mobility. Other programs such as the President s Emerging Leaders program can provide additional sources of employees who 3

4 will be able to take on additional leadership roles and projects that will benefit the University. Investment in both performance management and career mobility are needed in order to develop employees who will be successful in their jobs and also generate and maintain a pipeline of leaders who can successfully lead the University and help it achieve its mission. The Office of Human Resources will be the critical component in establishing an effective performance management system at the University, both at the central level and provide support to local levels within each college, department, and unit. Human Resources staffing serve as conduits between senior University leadership, deans, supervisors and employees, and without proper support of these interfaces, there will be no effective managers of a performance management system. Human Resources should therefore be provided with the necessary support, resources and tools to implement an effective performance management system at the University. It should be noted that the use of technology alone will not guarantee a successful system, but it can be part of the tools used to enact such a system. University employees will also have a responsibility to participate in the performance management system, but they will only do so if they trust the system and if they perceive benefits from participating. If they do not have clear expectations for their work then they will never be fully engaged in the process. The employees of the University have expressed a strong desire to support the University, and they want to feel valued for their efforts. Many people come to the University because of their fields, and many of them do not intend to become supervisors. By investing in an effective performance management system that actively recognizes and supports both employees and supervisors in their growth and development, the University will demonstrate that it values all its employees. Performance management may be tied to merit-based pay, but this needs to be implemented in a consistent and fair manner. Not all rewards and incentives need to be salary-based, as employees are also interested in opportunities for personal and professional development. Employees will be likely to stay longer and be more satisfied in their work if cross-divisional leadership and career coaching is provided at all levels, and the University will benefit from having a more supportive and effective workforce. For effective coaching to be taken seriously as part of the performance management process, however, people must see a clear relationship between the coaching provided and desirable outcomes. Coaching should be utilized at different points in the performance management process such as hiring processes, performance appraisals, training opportunities, and self-evaluations. The University s employees must see a positive relationship between the overall coaching process and other human resource processes, such as staffing and training, as well as the effective implementation of their own objectives, their unit s strategic plans, and the University s mission. Performance management should be an ongoing process, not a static one, and the system should be open to changes as the University evolves. It will take bold leadership to drive the system. There is no lack of energy and enthusiasm by the employees of the University. Employees have a passion for the mission of the University and work here because of the creativity, innovation and knowledge generated by this great institution. The University can reach its goal of being one of the top three public research universities in the world by investing in its employees. By committing to its employees, they will in turn give much more to the University, and what more could the University ask for from its employees. 4

5 Introduction In the University of Minnesota s 2005 strategic positioning report, Advancing the Public Good: Securing the University s Leadership Position in the 21 st Century, one of the five strategic action areas was identified as the need to recruit, mentor, reward, and retain world-class faculty and staff who are innovative, energetic, and dedicated to the highest standards of excellence. These strategic action areas, once implemented, are intended to support the University s mission to become one of the top three public research universities in the world. The People Task Force is one of seven administrative task forces appointed to work on these action areas. A project team from the President s Emerging Leaders (PEL) Program was assigned to the task force in the fall of 2005 at the request of its chair, Carol Carrier, Vice President for Human Resources. The project team was charged with researching and developing recommendations on the topics of performance management and career mobility at the University. Why focus on these topics as part of the strategic positioning process? University leadership recognizes that an organization is only as strong as the people who work in it. The University needs talented, motivated employees who are committed to the University and to its mission. An effective performance management system guides the hiring of employees; sets expectations for work to be performed; ensures that performance is monitored and appropriate feedback is provided; and supports the continued growth and development of employees. In the University of Minnesota s 2004 PULSE SURVEY, staff expressed favorable overall job satisfaction with the University as an employer, as well as satisfaction with their supervisors. However, they tended to be more moderately favorable or neutral in their satisfaction with promotion and pay issues, and in perceived supervisor support for career development and in perceptions of job security. These results were echoed in a 2005 survey of Civil Service staff on performance management practices. Project Objectives and Scope This project builds on previous work done by another PEL team which issued a report, Human Resources Leadership Development Project, in June The report recommended a systems approach to leadership development and stated that, accountability in the performance management system is essential to the continuous improvement and overall effectiveness of the organization. The following objectives were identified for this project in order to gain a better understanding of how performance management is conducted at the University and to identify opportunities for improvement: To inventory current performance management policies, practices, and systems currently in place at the University. To assess how colleges, departments, and units implement University policies regarding performance management. To identify internal and external performance management best practices. To identify roadblocks to implementing a new performance management system. To recommend a set of guiding principles for performance management that will provide a framework for the development of an effective system to assess employee performance and develop employee talent. 5

6 In the project s initial stages, the PEL team determined that career mobility should be considered an element of performance management. This is reflected in the body of the report and in the recommendations. Also, managers and supervisors are considered the same function in the context of a performance management system. The scope of this project focuses on the Twin Cities campus and does not include an examination of performance management practices for faculty or student employees. Related Efforts During an initial scan of information on the topic of performance management, the project team identified several activities and initiatives in progress at the University that relate to this project. A summary of each effort and the timeline for its completion are listed below. Civil Service The Office of Human Resources (OHR) and the Civil Service Committee (CSC) jointly sponsored a task force to look at performance management issues for Civil Service employees. Their work has included the following initiatives: a review of performance management literature; a survey of Big 10 universities to identify performance management practices in similar organizations; interviews with three Twin Cities businesses; and surveys of University Civil Service employees and supervisors. Results of the task force s work to date are available on the CSC s Web site at The task force began their work in fall 2005 and plan to release their final report during the summer of The PEL team and the task force have shared information and findings as they have become available. Senior Administrators and Deans A revised process was developed for the review and evaluation of senior administrators and deans at the University. Reviews and evaluations are scheduled every three years and will contain both evaluative and developmental components. For the evaluative component, data is gathered using a standardized, Web-based survey for internal University reviewers and a series of open-ended questions posed to external reviewers through a letter. Results are communicated to the individual being reviewed in a meeting with a review committee. The developmental component includes a 360-degree assessment of the individual and an optional coaching element whereby the individual being assessed may request assistance from a coach in performance areas that need strengthening. Implementation of this revised process was launched in August 2005 with the goal of completing evaluations of eight deans by July Plans to initiate this revised process with senior administrators are being finalized. People Task Force In addition to performance management, the People Task Force is exploring other employee issues as they relate to a human resource management system. They include: 6

7 1) recruitment and retention the goal is to attract and retain top talent who are innovative, energetic, and dedicated to the highest standards of excellence. 2) development, education and training the goal is to enhance the vitality of the institution s faculty and staff employees through continual investment in their ongoing development. 3) employee compensation and recognition the goal is to achieve and maintain competitive salary levels as appropriate to institutional peers or other specified labor markets. 4) performance management - the goal is to establish a performance management system that encompasses careful selection of personnel, articulation of work-related expectations, monitoring of performance, and support for continued growth and development. 5) work environment the goal is to support a work environment that provides resources and opportunities to enhance productivity and support individual and group successes, is responsibly managed, and fosters inclusiveness, employee well-being and ensures safety. The People Task Force s final recommendations and proposed projects will be available in summer Human Resources New Policy Development The Office of Human Resources proposed three new policies to address the following issues: 1) health and related benefits, 2) faculty and staff retirement, and 3) employee group definitions. The employee group definition policy established six formal employee groups (down from 15) that include: 1) Faculty, 2) Academic Professional and Administrative (P&A), 3) Civil Service (CS), 4) Union-Represented Staff (UN), 5) Graduate Assistant, and 6) Student. The Board of Regents approved this policy in December In part, it states that employees within each group are governed according to the policies, rules, and contracts applicable to their group. Methodology (Project Design) Through an exploration of existing systems, this project seeks to assist with the University of Minnesota s transformation into one of the top three public research universities in the world by investing in its human capital. The project examines the policies, practices and perceptions of the performance management and career mobility system at the University. Written and web-based documentation, internal interviews, external interviews and focus groups are utilized to: 1) inventory and assess current performance management policies and practices, 2) identify best practices internally and externally, and 3) identify roadblocks to the implementation of a new performance management system at the University. The results of this project will include a set of guiding principles that provide a framework for the development of a system to assess employee performance and develop employee talent. The application of qualitative research design methods facilitated an exploration of the policies, practices and perceptions of the University of Minnesota s performance management and career mobility system. Qualitative methods are frequently used when the researcher seeks to enhance or build on the understanding of a phenomena based on participants own ideas and perceptions (Creswell, 2002). The research, therefore, does not build on existing theories (Merriam, 1998). This project seeks to enhance the understanding and awareness of employees perceptions of existing performance management/appraisal systems at the University. 7

8 Project data was collected from existing University policies and documentation; performance management literature; interviews with external and internal constituents; and focus group interviews with University staff who were grouped by employee classification. Current Assessment of University Practices, Policies, and Systems As previously mentioned, this report focuses on academic professional and administrative (PA), Civil Service (CS), and union-represented (UN) staff on the Twin Cities campus. This section summarizes existing University practices, policies, and systems related to performance management for these employee groups. Annual Performance Reviews Specific policies and requirements for annual performance reviews are documented for each of the three employee groups. Following is a summary table of these policies and requirements. Additional information can be found in Appendix A of this report. PERFORMANCE REVIEW POLICIES AND REQUIREMENTS PA CS UN PURPOSES Recognize achievements and strengths Improve individual performance Establish plans/goals for employee development and growth Determine salary increases based on performance Facilitate communication/feedback between supervisors and employees POLICY & FORMAT Annual performance review required University-wide review forms provided 360-degree review input permitted Peer/subordinate review input permitted RESPONSIBILITIES Employee required to submit written report of accomplishments/goals Supervisor required to review employee s written report Supervisor required to provide written review to employee Supervisor required to discuss review with employee Employee may add written comments to supervisor s review Supervisor required to address employee s written comments Review must be on record and accessible to employee Campus/collegiate/administrative unit must ensure compliance with review policies Campus/collegiate/administrative unit must establish consequences for noncompliance A review of the information indicates that an annual formal written performance review of all employees is required. However, there is no evidence that compliance with this requirement is enforced across colleges, departments, and units at the University, or tracked centrally by OHR. 8

9 Review forms are provided for Civil Service and union-represented staff and are to be used unless alternate forms have been approved by OHR. For P&A staff, no form is provided, and oversight of formats and procedures for annual performance reviews is delegated to the senior administrator for a college or administrative unit. At present, no University-wide competencies or behaviors have been defined or provided for these employee groups in order to guide performance; establish targets against which performance is monitored; or assist in setting goals and growth areas for the coming year. Manager s Tool Kit The Office of Human Resources has developed a comprehensive on-line Manager s Tool Kit that is located on its Web site: It features a section on Performance Management that includes steps in performance management, information on conducting annual performance reviews, and dealing with performance problems. The site includes access to all pertinent policies by employee groups, processes for conducting annual performance reviews, and tips for utilizing performance management techniques with employees. Training for Supervisors and Managers In addition, OHR offers a variety of training programs designed to improve supervisory and management skills. A two-day session, Keys to Supervision: An Orientation for New Supervisors and Managers, is considered to be mandatory for newly appointed supervisors or managers. However, there does not appear to be a reliable mechanism in place for applying this requirement and tracking compliance across colleges, departments, and units. Other development opportunities for supervisors include a core skills training session which is offered in either seven half-day increments or a three-day retreat, and a series of special seminars called Supervisory Cinema. Review of the Literature An organization is enhanced by its ability to get the most out of its human capital (Robb, 2004). Performance management is one way to utilize human capital. A highly functioning performance management system exhibits both standardization and flexibility that may be used throughout the organization (Neary, 2002). A review of the literature highlights the following key concepts: the traditional use and application of performance appraisals, comparison of performance appraisal models, key components of a performance appraisal system and key principles from the literature. The theory behind the application of performance appraisals showed little change over the past 20 to 30 years (Richer, 2003). Performance management methods have been tools to enhance employee performance, typically involving an annual appraisal (Richer, 2003). The performance appraisal instrument is the primary source for evaluating employees and provides a consistent basis for administrative decision-making (Latham, G, Almost, J., Mann, S. and Moore, C., 2005). Traditional performance measures, however, may involve a judgmental retrospective process that may result in an inaccurate appraisal of the employee (IOMA, 2004). Ratings from managers have been shown to be unreliable and invalid (Richer, 2003). Managers, further, may not fully understand the intent of the performance appraisal or have the skills to perform the necessary evaluative and developmental tasks (Hazard, 2004; IOMA, 2004). Traditional problem areas for organizations in relation to performance 9

10 appraisal include: legal pitfalls, appraisal instruments, who should appraise the employee, objectivity, fairness, and the coaching process (Latham, G, Almost, J., Mann, S. and Moore, C., 2005). While the theory behind performance management systems has not changed significantly over the years, the application of performance management theory has taken different forms. The types of performance management models have changed as the types of work have changed. The Machine Model Appraisal system is an example of a traditional performance management model. Performance management is based on efficiency and continuous output. This system views workers as interchangeable cogs in a wheel, with a single person involved in the appraisal of an individual s work. Any employee meeting the minimum qualifications is considered satisfactory for maintaining product output (Richer, 2003). As organizations change, so too has the view of performance management. Performance management systems today may emphasize competencies, behaviors and/or objectives. A competency based performance management system establishes skills and behaviors necessary for an employee s success and future development. This system includes a set of core competencies required of all employees, with specific sets of skills attributed to certain roles. This system is transparent in its identification of performance criteria to be mastered in order to be considered for advancement. The core competencies reflect both the cultural and organizational goals (Martone, 2003). Competency based performance management systems work in almost any type of organization. Behavioral based performance management systems require intense job analysis to identify specific behaviors that may be attributed to successful performance in a given role. This performance management system compares an employee s behaviors with a description of possible behaviors (SHRM, 2004). Behaviorally based performance management systems clearly present to employees what behaviors should or should not continue. This system also recognizes and accommodates great job complexity (Latham, G, Almost, J., Mann, S. and Moore, C., 2005). Behaviors become the common reference points by which employees are appraised (SHRM, 2004). Behaviorally based performance management systems also entail employee coaching on behaviors that are observable, under employee control and critical to the implementation of the organization s strategy (Latham, G, Almost, J., Mann, S. and Moore, C., 2005). Management by objectives entails a process in which organizational goals are set collaboratively and individual employees are evaluated annually on the basis of how well organizational goals were achieved. Management by objectives is commonly referred to as goal setting (SHRM, 2004). Any system, whether behaviorally based, competency based or based on management by objectives, requires periodic assessment and review. The evolution of performance management systems resulted in an organizational focus on key employees. Key employees are members of the organization whose skill sets and work play an important role in the organization s success. Early performance management systems did not focus readily on these talented employees (Richer, 2003). However, these key employees are, by definition, pivotal to the organization. The identification of key talent often falls to managers (HRFocus, 2005). Training managers to identify and develop staff is a key element of a good performance management system (SHRM, 2004). An effective performance management system also includes the training of managers in feedback and coaching, employee development, and valuing and managing differences (Hazard 2004). 10

11 Technology may support an effective performance management system (Wingrove, 2003). The use of technology in a performance management system may consist of a completely online, integrated system through which employee feedback, manager feedback, and compliance are entered and tracked. Technology can also play a more subdued role by serving as a conduit to access online resources such as performance management policies and protocols or performance appraisal forms. A 2003 study of 3600 organizations around the world found that 20% of organizations currently use online software or online delivery methods for their performance management systems. An additional 25% of those surveyed indicated intent to integrate technology into their existing performance management systems (Supervision, 2005). Technology may assist in reducing paperwork, increasing anonymity and expanding the function of a performance management system which tracks individual employees and manager compliance (Robb, 2004). Technology, however, may also derail a performance management process through over reliance on the system, poor training of employees and managers, or through the development of a system which does not effectively support the organization s needs (Gil, 2004). Effective performance management systems should serve the individual employee as well as the organization. There are several opinions relating to the components of an effective performance management system. The most common components of successful performance management systems presented in the literature include the following: Holds managers accountable Mirrors organizational culture Links to compensation Integrates development with performance Includes individual employee feedback Trains managers and employees Links individual position to performance management system Focuses on the right performance measures Aligns daily activities with organizational strategies or goals Addresses employee expectations Provides continuous feedback to the employee Williams, 2001, HRFocus, 2005; Neary 2003, SHRM 2004; Martone, 2003; Latham, G, Almost, J., Mann, S. and Moore, C., Based on the review of the literature, this project defines performance management as a shared process that includes assessing, managing, planning and improving an employee s performance to promote development that serves both the individual and the organization. Eight guiding principles were identified from the literature review, and can be used as guidelines for constructing the framework of an effective performance management system. They are listed as follows: 1. A system vs. point-in-time approach Performance management is an ongoing process that begins with an appropriate position description and hiring process that leads to the hiring of the person most capable to do the job. Ongoing performance management of that person includes setting goals, checking in and monitoring the work, and evaluating the performance. In a system approach, the employee does not receive feedback for the first time at an annual performance review. Feedback is given as a regular part of the dialogue between supervisors and direct reports. 11

12 2. Linkages to mission The visible link between organizational and individual goals, which determines what needs to get done. Tools include setting an organization s mission, vision, values, and expectations. 3. Accountability and management support Organizational leaders need to regard performance management as being core to the operations of the enterprise. The amount of buy-in that senior managers hold in a system has a direct effect on the success or failure of the system. 4. Credibility of system Employees must see the relationship between the coaching provided and desirable outcomes. Additionally, employees should see a positive relationship between the coaching process and other human resource systems, including staffing and training, as well as the effective implementation of the team s, division s and organization s strategic plans. System credibility may be impaired by mistrust of managers and their abilities. 5. Management training and coaching Managers must be sufficiently trained to prepare for and perform employee evaluations. If a manager is trained improperly to do performance reviews/appraisals, the likelihood of rater bias increases. A feedback process to evaluate how the work is being done is beneficial for both the employee and the manager. Examples of tools include yearly reviews, periodic reviews, 360- degree evaluations, coaching and mentoring. 6. Utilization of technology Technology may be a useful tool for assistance in implementing the performance management process. Technology can assist with the standardization of performance management systems and measurement of compliance. Over utilization of technology may interfere with an effective performance management system. 7. Competency-based versus behavioral-based appraisals Whether an organization focuses on a set of system-wide competencies or on a set of individual behaviors relative to a specific role, performance management systems, when appropriately applied, may be extremely useful. Competency-based systems provide a clearly defined path toward professional advancement and successful job performance. Behavioral-based models provide a mechanism for continuous feedback from managers, where employees understand what specific and measurable behaviors are expected within a given role. 8. Relationship to compensation varies Although compensation is an important motivator in employee performance, it is not the only motivator. Employees are also motivated by professional development opportunities (e.g. talent management) and the ability to relate their role to the context of the organization as a whole. 12

13 Internal and External Personal Interviews Interview Protocol Personal interviews were conducted with representatives from internal and external constituencies in an effort to identify existing performance management best practices. External organizations interviewed included Cargill Companies, Ecolab, General Mills, and Medtronic. University of Minnesota Physicians and University Libraries were the two internal University units interviewed, along with several human resources experts located throughout the University. Interviews of external and internal constituencies followed the same protocol. Once an interview was scheduled, at least two team members conducted the interviews using pre-determined questions. Questions were based on findings from the literature review and scanning interviews with other internal and external constituencies. Summaries of the personal interviews are in Appendix B. Focus Groups The project team conducted a series of ten focus group sessions to sample University employees experience with, and perceptions of, performance management at the University. Sixtythree individuals participated, and included deans, academic professional and administrative, Civil Service, and union-represented staff on the Twin Cities campus. Volunteer participants were solicited via through human resource professionals in collegiate units. Individuals interested in participating responded via to a member of the project team. The project team member assembled and scheduled focus groups to ensure a balance of employee classifications as well as a mix of supervisors and non-supervisors. Each focus group participant completed a consent form, basic demographic form, and answered a series of six questions in a 90-minute confidential interview. See Appendix C for a summary of the focus groups. Interview and Focus Group Analysis Analysis of the interview and focus group data validated the eight guiding principles that developed out of the literature review. A summary of the analysis follows: Principle 1: A system vs. point-in-time approach Concept External Interview Findings 13

14 Performance management as an ongoing process that begins with an appropriate position description and hiring process that leads to the hiring of the person best capable to do the job. Ongoing performance management of that person includes setting goals, checking in and monitoring the work, and evaluating the performance. In a system approach, the employee does not receive feedback for the first time at an annual performance review. Feedback is received as a regular part of the dialogue between supervisors and direct reports. Cargill recently implemented a comprehensive system that took two years for full implementation. Each manager meets with employees at least four times a year with the intent to focus on feedback. They conduct two reviews annually, one formal and one informal, and they utilize a 360-degree review tool every 18 to 24 months. At General Mills, performance feedback is a continuous process and not just an annual event. Objectives are set in June, an individual development plan is done in August-September, mid-year reviews are done in December-January, performance appraisals are done in May-June, and rewards are calculated in July. Ongoing feedback is also expected. Cargill, Ecolab, and Medtronic all have formal programs to identify high achievers that can move into positions when retirements or changes occur. The benefit of a comprehensive program allows the companies to stay competitive without the expense of a national search or the absence that is felt when a key person is lost and not replaced for years. Internal Interview Findings University Libraries is a good example of a currently effective University performance management system. Professional and Administrative (primarily Academic) employees have performance reviews in the spring and promotion/tenure reviews in the fall. Civil Service and bargaining units have mandatory midpoint reviews and final performance reviews in the spring. During P&A performance reviews, personal and professional goals are established. Civil Service and bargaining units are also incorporating this goal-setting process into their performance reviews. All supervisors/managers are also expected to provide feedback on an ongoing basis. Performance reviews include information about employees performance, areas for improvement, and goals for the next year. Employee goals are expected to evolve as needed. Employees may also request a meeting if they are not satisfied with their reviews. UM Physicians performance management system utilizes the following cycle: an annual performance review in July/August followed by performance planning; in March employees meet with their supervisors for a career planning and goal setting session; ongoing feedback and coaching is encouraged throughout the year. Also during March, employees have the opportunity to fill out a survey for their supervisor and provide feedback on their performance. Focus Group Findings Performance management as a system was not utilized in many areas. Some employees never received a review, and for others it had been some years since their last review. One participant stated: My annual review gets put off by my supervisor so I ve never had one. If there is an issue she comes to me right away. Even if there were a formal review meeting, the feedback received was not always meaningful. Many employees stated that they felt that supervisors were not adequately trained to deliver effective feedback. There is a lack of consistency in use of forms; the process varies from unit to unit. Whereas some supervisors filled out the evaluation form and met with the 14

15 employee to discuss it, others required the employee to create the evaluation form and then meet with the supervisor. Expectations were not always clear, and there were many who stated that there were disconnects between their job description (if they had one) and the work that was performed. Many work around the system and create their own resources within their unit. One employee with supervisory responsibilities refers to the inconsistency of performance management processes: [I am] not sure if form is same; what s expected; job description, job ability vs. personality; [I] don t get raises based on it; staff view them [performance appraisals] as a joke and [I haven t] had a review in 2 years. Principle 2: Linkages to mission Concept The visible link between organizational and individual goals, which determines what needs to get done Tools include setting an organization s mission, vision, values, and expectations. External Interview Findings Expectations for employees are linked to the goals of Medtronic s business units and its overall mission. Performance management is used to improve General Mills performance through accelerating the contribution and development of its employees. Employees objectives are aligned with the company and business unit objectives. Cargill uses a competency-based model for its performance management system in which the competencies are based on the organization s mission. Internal Interview Findings For job postings, University Libraries goes through Human Resources and works to establish job descriptions that cover both work requirements and the overall goals of University Libraries (plus the University in general). As part of the University of Minnesota Physicians system, job responsibilities are aligned with UM Physicians business plan. Focus Group Findings The majority of employees stated that they know the University s mission and believe they contribute to its higher purpose. I do feel connected to the mission because I work so closely with students, other faculty and the public. By doing support work for the U of M, I feel connected to the U; I see where I fit in about every project. Many employees feel connected to the University s mission but it is not always apparent in their unit what the connection is to their specific unit or job. Many stated that they would like more communication even if it were through repeated statements. Administration has to articulate where you fit in the mission and employees need to know where the pilot wants the plane to go. 15

16 Principle 3: Accountability and management support Concept Organizational leaders need to regard performance management as being core to the operations of the enterprise. The amount of buy-in that senior managers hold in a system have a direct effect on the success or failure of the system. External Interview Findings A well-functioning performance management system requires accountability at every level. All the companies have established accountability measures. All the companies also stated that senior leaders and managers must support and comply with the system in order for it to be successful. In particular, General Mills stated that if leadership is just concerned about their day-to-day needs, then they tend to be shortsighted and not spend time investing in performance management or career mobility simply because they are concerned that their employees might leave once investments have been made in developing them. Ecolab has built accountability into its new performance management system. A continuous cycle of communication is used to inform managers of their responsibilities and encourage compliance. Automatic reminders are sent to managers to remind them of deadlines in advance, to follow up on their compliance, and to provide them with the tools that they need to comply. Medtronic requires manager compliance, and it is not an issue as all managers are mandated to comply with the performance management system. Cargill requires all its salaried employees to evaluate employees. General Mills requires both employees and managers to be accountable for the performance management process. Internal Interview Findings Both internal units established new performance management systems that require accountability at every level. Both internal units have performance management systems that are supported by authority at the highest levels. University Physicians enacted a paradigm shift with respect to performance management, and the success of the new system is the result of: 1) authority granted at the highest levels, 2) penalties for non-compliance, and 3) the removal of other alternatives. University Libraries requires its supervisors and managers to comply with the system. If an employee does not receive a review then this is noted (employees can also report non-compliance). A follow-up is done with the employee s supervisor, and if a review is not completed then somebody else does it for the employee and the supervisor s failure to comply is noted on his or her own record. The supervisors compliance or lack thereof is tracked and the information is used in their own performance reviews. With the dean s approval, salary increases for supervisors have been withheld due to non-compliance. Focus Group Findings Performance management systems were not utilized in many units, and one 16

17 general problem identified is that there was no buy-in to the system or interest in compliance. A number of employees stated that their supervisor was not invested in performance reviews. One commented, My supervisor, a faculty member, does not want to spend his time focused on this. He doesn t see it as a good use of his time. Some employees have never received reviews or receive them sporadically. One participant stated: My annual review gets put off by my supervisor so I ve never had one. If there is an issue she comes to me right away. Principle 4: Credibility of system Concept Employees must see the relationship between the coaching provided and desirable outcomes. Additionally, employees should see a positive relationship between the coaching process and other human resource systems, including staffing and training, as well as the effective implementation of the team s, division s and organization s strategic plans. System credibility may be impaired by mistrust of managers and their abilities. External Interview Findings All the companies stated that consistency is a critical component in establishing a credible performance management system. Ecolab uses the same performance appraisal process for all employees; however, the content will be different for each person (e.g. tailored to their needs) since the form also incorporates an individual development plan (IDP) as a supplement. Internal Interview Findings The two internal units did not make any specific mentions regarding the credibility of their performance management systems. Focus Group Findings Supervisors were not adequately trained to deliver effective feedback. During reviews, expectations were not always clear and there were many who stated that there were disconnects between their job description (if they had one) and the work that was performed. Supervisors were identified as a key component to employee satisfaction. Employees expressed concerns about how supervisors communicate opportunities for growth. One employee stated, Leaders are faculty; hierarchy; communication is one-way; they only want status reports, not feedback; it s very frustrating that they won t listen. Supervisors stated that they would like more training to be better supervisors and yet they did not feel that it was important to their own supervisors. Employees suffered because of the lack of communication skills needed to get the work done. Professional development was discouraged in some units. Furthermore, money seemed to be a key issue in units where employees did not know about availability of professional development funds. Some employees were told there were no funds, while others were told that funds went to research. One person stated that she had to pay for her own professional development. Principle 5: Management training and coaching 17

18 Concept Managers must be sufficiently trained to prepare for and perform employee evaluations. If a manager is trained improperly to do performance reviews/appraisals, the likelihood of rater bias increases. A feedback process to evaluate how the work is being done is beneficial for both the employee and the manager. Examples of tools include yearly reviews, periodic reviews, 360-degree evaluations, coaching, and mentoring. External Interview Findings Most companies talked about coaching and training for managers as well as for employees. The descriptions below reflect each company s process. Ecolab has a system in place to ensure managers will complete employees individual development plans in full by providing encouragement and training (teach them in pairs, give them case studies, et cetera). Ecolab wants to grow employee s talents and best utilize them throughout the company. Ecolab, consequently, provides training to integrate coaching with their performance management system. Medtronic and General Mills use a 9-box leadership performance/potential grid for talent management, career progression and succession planning. The goal is to move leaders from individual contributors to managers, and Personnel Decisions International (PDI) is used for executive leadership and development training. Ecolab provides training to their managers on an ongoing basis through intensive sessions (i.e. 3.5 days, 8 hours, 6 hours) that include exercises such as role-playing and discussions about how to set objectives, et cetera. A financial incentive includes linking performance appraisals to merit pay by utilizing employees appraisals to determine what ranges of merit pay apply. Cargill trains mangers through online self-taught technology tools. They are working on a new standardized performance management system that will include a module/overview approach to the training of managers. Before doing any performance evaluations, each manager should have opportunities for experiential learning, such as meeting with their own manager for coaching. Internal Interview Findings University Libraries supervisor training is provided three times a year internally and covers performance management responsibilities. Supervisors are required to provide ongoing feedback and coaching to employees. In addition, highperforming P&A employees are tracked automatically through the promotion/tenure process. University Physicians does not have a formal training program. Focus Group Findings Responses included better communication, working in a respectful environment, and an increased focus on professional development and training of employees and supervisors. One participant suggested specific training opportunities for supervisors: Mandatory supervisor course on management skills; not enough training; not enough time to do a good job managers [should be] obligat[ed to attend, particularly since there are] lots of administrators [who are] not [good] managers especially faculty. Supervisors were identified as a key component to employee satisfaction. Employees expressed concerns about how supervisors communicate opportunities for growth. One employee asserts: Leaders are faculty; hierarchy division; [the] communication is one-way; status reports, [leaders] don t want feedback ; [it is] very frustrating; [they] won t 18

19 listen Money seemed to be a key issue in units where employees did not know about availability of professional development funds. Some employees were told there were no funds, while others were told that funds went to research. One person stated that she had to pay for her own professional development. The following three statements capture some of the challenges: Professional development [is] encouraged but not necessarily funded; have a budget to work with; encouraged to participate in seminars/lectures on campus Unit budgets professional development; everyone on team expected to take advantage of them; supervisors [are] not encouraged to get professional development Focus Group Findings - cont Soft money reliance doesn t allow for professional development; real conflict; need a solution or will lose people There appears to be a lack of consistency among units. Employees, however, wanted to learn and build their skills with many stating they took advantage of the Regent s Scholarship because they are learners. Almost all of the participants stated that they had to ask for professional development training and that it was not offered to them by their supervisor. Professional development was discouraged in some units. One focus group participants indicated that the lack of professional development resulted in his/her departure from the unit for a better paying position and more opportunities. One employee stated, nothing against the PEL program, but there is nothing systematic in place to support how people can move around the University to be utilized for projects. There are so many good people who have to go elsewhere to advance. Training seemed to be a missing component both from the perspective of the employee and from those who supervise. Training was not seen as a benefit since work needs to be done each day and that is the priority in most units. Supervisors stated they would like more training to be better supervisors yet they did not feel that it was important to their supervisors. Employees suffered because of the lack of communication skills needed to get the work done. One participant commented: There is great potential for leadership but faculty and staff must be given the tools ; we succeed in spite of the system not because of it ; and we need strong human resources to give advice, provide guidelines and training. Staff stated that communication was critical and that they want to feel valued by faculty and their supervisor with one stating: I don t feel valued or respected by faculty; they don t recognize the contributions of staff. They feel that their supervisors should mentor and coach them and give them recognition for achievements. I would like a clearly defined career path steps to follow. 19

20 Many stated that they would like more opportunities to grow through new job duties, projects, or higher levels of responsibilities. You have a pool of people looking for challenges with specialists everywhere. Put them all together and have them work on special projects. We should not be like islands. I want to say I work for the University, not just my department. Principle 6: Utilization of technology Concept Technology may be a useful tool for assistance in implementing the performance management process. Technology can assist with the standardization of performance management systems and measurement of compliance. Over utilization of technology may interfere with an effective performance management system. External Interview Findings Most companies utilize technology to support their performance management system. Ecolab s corporate record department keeps records of performance appraisals, while using an Excel tracking system to observe and track compliance and send reminders. Medtronic uses PeopleSoft to track performance management online. Human Resources owns the system. General Mills does not use any online performance management systems. Internal Interview Findings University Physicians performance management system is completely online (it uses software from Lawson, Microsoft, et cetera). Focus Group Findings There were no examples of the utilization of technology. Principle 7: Competency-based versus behavioral-based appraisals Concept Whether an organization focuses on a set of systemwide competencies or on a set of individual behaviors relative to a specific role, performance management systems, when appropriately applied, may be extremely useful. Competency-based systems provide a clearly defined path toward professional advancement and successful job External Interview Findings Variation exists among companies with regard to the type of performance management system employed. Medtronic uses a competency-based system throughout the organization that is based on 20 competencies (developed by Personnel Decisions Incorporated). Leadership is also tied to these competencies. Ecolab, Cargill and General Mills use behavioral-based appraisals. Ecolab has developed a job profile tool that includes business drivers and job descriptions which are used for recruitment and performance management. They take into account team performance as well as individual performance by evaluating the behaviors using a cheat sheet which educates them on what 20

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